NMI™ at 56.1%; December Non-Manufacturing ISM Report On Business®; Business Activity Index at 60.3%; New Orders Index at 59.3%; Employment Index at 56.3%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of December 2012.

TEMPE, Ariz., Jan. 4, 2013 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in December for the 36th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI™ registered 56.1 percent in December, 1.4 percentage points higher than the 54.7 percent registered in November. This indicates continued growth at a slightly faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 60.3 percent, which is 0.9 percentage point lower than the 61.2 percent reported in November, reflecting growth for the 41st consecutive month. The New Orders Index increased by 1.2 percentage points to 59.3 percent. The Employment Index increased by 6 percentage points to 56.3 percent, indicating growth in employment for the fifth consecutive month at a significantly faster rate. The Prices Index decreased 0.4 percentage point to 56.6 percent, indicating prices increased at a slightly slower rate in December when compared to November. According to the NMI™, 13 non-manufacturing industries reported growth in December. Respondents' comments remain mixed and are mostly positive about business conditions and the economy."

"The holidays will slow construction some, but overall business remains about 25 percent ahead of last year. Weather has been favorable." (Wholesale Trade)

"Due to the extra week between Thanksgiving and Christmas, we are seeing our customers shopping later this year." (Retail Trade)

"Business has picked up significantly during this last quarter of the year." (Transportation & Warehousing)

"Preparing for substantial business due to heavier than normal crop forecast." (Agriculture, Forestry, Fishing & Hunting)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE

COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS*

DECEMBER 2012

Non-Manufacturing

Manufacturing

Index

Series

Index

Dec

Series

Index

Nov

PercentPointChange

Direction

Rate of

Change

Trend**

(Months)

Series

Index

Dec

Series

Index

Nov

PercentPointChange

NMI™/PMI™

56.1

54.7

+1.4

Growing

Faster

36

50.7

49.5

+1.2

Business Activity/

Production

60.3

61.2

-0.9

Growing

Slower

41

52.6

53.7

-1.1

New Orders

59.3

58.1

+1.2

Growing

Faster

41

50.3

50.3

0.0

Employment

56.3

50.3

+6.0

Growing

Faster

5

52.7

48.4

+4.3

Supplier Deliveries

48.5

49.0

-0.5

Faster

Faster

2

54.7

50.3

+4.4

Inventories

50.0

47.0

+3.0

Unchanged

From Contracting

1

43.0

45.0

-2.0

Prices

56.6

57.0

-0.4

Increasing

Slower

6

55.5

52.5

+3.0

Backlog of Orders

49.5

53.5

-4.0

Contracting

From Growing

1

48.5

41.0

+7.5

New Export Orders

49.5

48.0

+1.5

Contracting

Slower

3

51.5

47.0

+4.5

Imports

49.0

55.5

-6.5

Contracting

From Growing

1

51.5

48.0

+3.5

Inventory Sentiment

58.0

62.5

-4.5

Too High

Slower

187

N/A

N/A

N/A

Customers' Inventories

N/A

N/A

N/A

N/A

N/A

N/A

47.0

42.5

+4.5

* Non-ManufacturingISM Report On Business®data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. Manufacturing ISM Report On Business®data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

ISM's Non-Manufacturing Business Activity Index in December registered 60.3 percent, 0.9 percentage point lower than the 61.2 percent registered in November. Thirteen industries reported increased business activity, and five industries reported decreased activity for the month of December. Comments from respondents include: "Year-end surge" and "More orders being released from clients."

ISM's Non-Manufacturing New Orders Index grew in December for the 41st consecutive month. The index registered 59.3 percent, an increase of 1.2 percentage points from the 58.1 percent reported in November. Comments from respondents include: "To make up for the slow months and to finalize already approved investment by year end" and "New incoming projects."

ISM's Non-Manufacturing Inventories Index remained unchanged in December following three consecutive months of contraction. The index registered 50 percent, which is 3 percentage points higher than the 47 percent reported in November. Of the total respondents in December, 26 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Actively trying to reduce inventory" and "Same levels; consumption up; more turns."

Prices paid by non-manufacturing organizations for purchased materials and services increased in December for the sixth consecutive month. ISM's Non-Manufacturing Prices Index for December registered 56.6 percent, 0.4 percentage point lower than the 57 percent reported in November. In December, the percentage of respondents reporting higher prices is 15 percent, the percentage indicating no change in prices paid is 76 percent, and 9 percent of the respondents reported lower prices.

ISM's Non-Manufacturing Backlog of Orders Index contracted in December for the third time in the past four months. The index registered 49.5 percent, which is 4 percentage points lower than the 53.5 percent reported in November. Of the total respondents in December, 38 percent indicated they do not measure backlog of orders.

The seven industries reporting an increase in order backlogs in December — listed in order — are: Construction; Management of Companies & Support Services; Health Care & Social Assistance; Information; Finance & Insurance; Public Administration; and Wholesale Trade. The six industries reporting lower backlog of orders in December — listed in order — are: Other Services; Mining; Professional, Scientific & Technical Services; Accommodation & Food Services; Utilities; and Retail Trade.

Backlog of Orders

%Higher

%Same

%Lower

Index

Dec 2012

14

71

15

49.5

Nov 2012

17

73

10

53.5

Oct 2012

15

68

17

49.0

Sep 2012

14

68

18

48.0

New Export Orders

Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel contracted in December for the third consecutive month. The New Export Orders Index for December registered 49.5 percent, which is 1.5 percentage points higher than the 48 percent reported in November. Of the total respondents in November, 68 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.

The ISM Non-Manufacturing Imports Index contracted in December for the fourth time in the last six months. This month's reading at 49 percent is 6.5 percentage points lower than the 55.5 percent reported in November. Sixty-one percent of respondents reported that they do not use, or do not track, the use of imported materials.

The three industries reporting an increase in imports for the month of December are: Information; Agriculture, Forestry, Fishing & Hunting; and Other Services. The four industries reporting a decrease in imports for the month of December are: Educational Services; Finance & Insurance; Wholesale Trade; and Retail Trade. Ten industries reported no change in imports for the month of December compared to November.

Imports

%Higher

%Same

%Lower

Index

Dec 2012

9

80

11

49.0

Nov 2012

18

75

7

55.5

Oct 2012

9

81

10

49.5

Sep 2012

9

82

9

50.0

Inventory Sentiment

The ISM Non-Manufacturing Inventory Sentiment Index in December registered 58 percent, which is 4.5.percentage points lower than the 62.5 percent reported in November. This indicates that respondents believe their inventories are still too high at this time. In December, 24 percent of respondents said their inventories were too high, 8 percent said their inventories were too low, and 68 percent said their inventories were about right.

The eight industries reporting a feeling that their inventories are too high in December — listed in order — are: Arts, Entertainment & Recreation; Wholesale Trade; Mining; Other Services; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Accommodation & Food Services; and Professional, Scientific & Technical Services. The five industries reporting that its inventories are too low in December are: Management of Companies & Support Services; Public Administration; Retail Trade; Health Care & Social Assistance; and Construction.

Inventory Sentiment

%Too High

%About Right

%Too Low

Index

Dec 2012

24

68

8

58.0

Nov 2012

29

67

4

62.5

Oct 2012

31

66

3

64.0

Sep 2012

31

68

1

65.0

About this Report

The data presented herein is obtained from a survey of non-manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making.

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Backlog of Orders, New Export Orders, Inventory Change, Inventory Sentiment, Imports, Prices, Employment and Supplier Deliveries), this report shows the percentage reporting each response, and the diffusion index. Responses represent raw data and are never changed. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The remaining indexes have not indicated significant seasonality.

The NMI™ (Non-Manufacturing Index) is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the non-manufacturing economy in that index is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.

The Non-Manufacturing ISM Report On Business® surveys are sent out to Non-Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM then compiles the reports for release on the third business day of the following month.

The industries reporting growth, as indicated in the Non-Manufacturing ISM Report On Business® monthly reports, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

The Non-Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the first supply institute in the world. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education.

The full text version of the Non-Manufacturing ISM Report On Business® is posted on ISM's Web site at www.ism.ws on the third business day of every month after 10:10 a.m. (ET).

The next Non-Manufacturing ISM Report On Business® featuring the January 2013 data will be released at 10:00 a.m. (ET) on Tuesday, February 5, 2013.